WATCHMAKING IS DEAD, LONG LIVE WATCHMAKING

WATCHMAKING IS DEAD, LONG LIVE WATCHMAKING

Month after month, the negative
figures continue to pour
in. In April, Swiss watch exports
fell once again, by 11.1% to be
precise, compared with April 2015. Since
the beginning of the year, the overall
decline is edging towards -9.5%. With
the notable exception of the USA, which
has “climbed” a rather modest 1.2%, all
key markets are in decline: China -36%,
Hong Kong -17%, Italy -12.3%, Germany -11.1%, Japan -5.8%.... need we go on?

And these are just the top six markets.
What is even more worrying: this
time it’s the top-drawer companies that
are taking the hit. “Watches in precious
metals were the most strongly affected in
April and clearly exerted a downward
pull on the overall result,” announced
the Fédération Horlogère FH in a press release,
noting that the decline in sales of
steel watches, “while considerable, was
half as significant.”

Swiss watchmakers, who have withdrawn
in droves to their gilded towers, assuming
they are sufficiently insulated from the
carnage being dealt out down below, are
seeing their model of absolute exclusivity,
reserved for the infamous 1% of the
world’s richest, dangerously undermined.

Whose fault is it? Please, don’t try to pin
it on smartwatches. That would be far
too convenient. The rise to prominence
of these “watches”, which are not really
watches at all (or only very marginally),
has simply coincided with a situation
that would in all likelihood have happened
anyway. No, what we are witnessing
is a turning point for society, a pivotal
moment that the majority of Swiss
watchmakers, with very few exceptions,
were unable, or unwilling, to even countenance.
We’ve said it a thousand times:
you neglect accessible watches, and
retreat to the inaccessible, at your peril.

The mad rush to exclusionary heights of
extravagance has almost played out, and
the consequences are painful to contemplate.
At the risk of repeating ourselves,
we’ll say once again that the watchmaking
industry is a mirror of the society that
imagined, designed and built it. And the
signs are all there for anyone who cares
to read them: the dominant model, based
as it is upon increasingly blatant inequality,
is close to becoming intolerable. This
growing inequality is reflected perfectly
by the Swiss watch industry, which produces
a little over 2% of all watches sold
worldwide (in 2015, 28 million out of 1.2
billion), but pockets 50% of the revenues.
And that is quite obviously unbalanced,
however you choose to look at it. As excess
has been piled upon excess, the image
of the Swiss watch has also been seriously
tarnished. As its most extravagant
creations were spotted on the wrists of
Mexican drug lords, corrupt Chinese
functionaries, louche Russian oligarchs,
narcissistic rappers and vapid celebrities,
the Swiss watch industry has seen its
global image become tainted, suspect.

In parallel, we have seen a gradual rise
to prominence of the more punctilious
German watch industry, which resisted the
siren song of bling and is now doing very
well, thank you. The same could be said of
Japan, whose watchmaking skills are increasingly
well-regarded and recognised.*
Because despite everything, watchmaking
is not dead. Far from it. You only
have to look at the astonishing number
of watchmaking startups – in both the
smartwatch and traditional watch segments
– who have launched successful
crowdfunding campaigns. Or look at the
runaway success of the new entry-level
giants offering a classic, conservative aesthetic.
Or even the huge vintage watch
revival, which demonstrates the appeal,
even to younger generations, of conservative,
discreet, classically elegant mechanical
watchmaking with a rich history.

No, watchmaking is not dead. Far from
it. But its economic model is changing.
And we’ve heard the death knell of a
certain brand of arrogance, of which the
public has had its fill. We’ll be revisiting
all these topics in the June-July issue of Europa Star (See Contents page).
We hope you enjoy them. Oh, and... long
live watchmaking.

*At the time of going to press we learned that
Frédérique Constant had been bought by Citizen.
When we interviewed the company’s founder and
CEO Peter Stas for this issue, we asked him about
his price offensive, illustrated by the launch of a
Perpetual Calendar for less than 8,000 euros. He
didn’t say anything about the buyout, which was
clearly already in the works, but the sale does lend
support to our hypothesis that Japanese watchmakers
have got it right where it comes to the importance
of moderation in both pricing and aesthetics.